Regional Differences and Dynamic Evolution of Agricultural Product Market Integration in China
Abstract
:1. Introduction
2. Materials and Methods
2.1. Materials
2.2. Methods
2.2.1. Relative Price Method
2.2.2. Dagum–Gini Coefficient and Decomposition
2.2.3. σ Converge Model
2.2.4. β Convergence Model
3. Results
3.1. Status of the Integration of the Agricultural Product Market in China
3.2. Characteristics and Sources of Spatial Differentiation
3.3. Trend in Development over Time
3.3.1. σ Convergence Analysis
3.3.2. Absolute β Convergence Analysis
3.3.3. Conditional β Convergence Analysis
4. Discussion
5. Conclusions and Policy Implications
5.1. Conclusions
5.2. Policy Implications
Author Contributions
Funding
Institutional Review Board Statement
Data Availability Statement
Conflicts of Interest
References
- Bian, Y.; Song, K.; Bai, J. Market segmentation, resource misallocation and environmental pollution. J. Clean. Prod. 2019, 228, 376–387. [Google Scholar] [CrossRef]
- Borsellino, V.; Schimmenti, E.; El Bilali, H. Agri-food markets towards sustainable patterns. Sustainability 2020, 12, 2193. [Google Scholar] [CrossRef]
- Miao, X.; Han, J.; Wang, S.; Li, X. Spatial effects of market integration on the industrial agglomeration of agricultural products: Evidence from China. Environ. Sci. Pollut. Res. 2023, 30, 84949–84971. [Google Scholar] [CrossRef] [PubMed]
- Kabbiri, R.; Dora, M.; Elepu, G.; Gellynck, X. A global perspective of food market integration: A review. Agrekon 2016, 55, 62–80. [Google Scholar] [CrossRef]
- Kim, S. Expansion of markets and the geographic distribution of economic activities: The trends in US regional manufacturing structure, 1860–1987. Q. J. Econ. 1995, 110, 881–908. [Google Scholar] [CrossRef]
- Naughton, B. How much can regional integration do to unify China’s markets? In How Far Across the River; Stanford University Press: Redwood City, CA, USA, 2003; pp. 204–232. [Google Scholar]
- Parsley, D.C.; Wei, S.J. Convergence to the law of one price without trade barriers or currency fluctuations. Q. J. Econ. 1996, 111, 1211–1236. [Google Scholar] [CrossRef]
- Xu, X. Have the Chinese provinces become integrated under reform? China Econ. Rev. 2002, 13, 116–133. [Google Scholar] [CrossRef]
- Young, A. The razor’s edge: Distortions and incremental reform in the People’s Republic of China. Q. J. Econ. 2000, 115, 1091–1135. [Google Scholar] [CrossRef]
- Ke, S. Domestic market integration and regional economic growth—China’s recent experience from 1995–2011. World Dev. 2015, 66, 588–597. [Google Scholar] [CrossRef]
- Zhang, Y.; Hao, X.Y.; Han, Y.J. Analysis on vertical price transmission and market integration of wheat industry chain in China. Econ. Probl. 2018, 65–70. [Google Scholar]
- Loy, J.P.; Weiss, C.R.; Glauben, T. Asymmetric cost pass-through? Empirical evidence on the role of market power, search and menu costs. J. Econ. Behav. Organ. 2016, 123, 184–192. [Google Scholar] [CrossRef]
- Abay, K.A.; Abdelfattah, L.; Breisinger, C.; Siddig, K. Evaluating cereal market (dis) integration in less developed and fragile markets: The case of Sudan. Food Policy 2023, 114, 102399. [Google Scholar] [CrossRef]
- Wu, L.P. Study on the relationship between domestic and foreign grain markets. Chin. Rural. Obs. 2001, 01, 24–32. [Google Scholar] [CrossRef]
- Li, Z.; Diao, G.; Zhao, H.F. Dynamic Analysis of Chinese mutton price market integration: Granger Causality Test based on spectrum. Agric. Tech. Econ. 2020, 11, 122–134. [Google Scholar] [CrossRef]
- Nigatu, G.; Adjemian, M. A wavelet analysis of price integration in major agricultural markets. J. Agric. Appl. Econ. 2020, 52, 117–134. [Google Scholar] [CrossRef]
- Zhou, Z.Y.; Wan, G.H.; Chen, L.B. Integration of rice markets: The case of southern China. Contemp. Econ. Policy 2000, 18, 95–106. [Google Scholar] [CrossRef]
- Latham, A.J.H.; Neal, L. The international market in rice and wheat, 1868–1914. Econ. Hist. Rev. 1983, 36, 260–280. [Google Scholar] [CrossRef]
- Awokuse, T.O. Market reforms, spatial price dynamics, and China’s rice market integration: A causal analysis with directed acyclic graphs. J. Agric. Resour. Econ. 2007, 32, 58–76. [Google Scholar]
- Rozelle, S.; Park, A.; Huang, J.; Jin, H. Liberalization and rural market integration in China. Am. J. Agric. Econ. 1997, 79, 635–642. [Google Scholar] [CrossRef]
- Zhou, W. The role of the state in making a national market: The evolution of the grain market in China (1978–2000). China Agric. Econ. Rev. 2010, 2, 276–297. [Google Scholar] [CrossRef]
- Huang, X.; Chen, S.; Li, T. Price differences, market segmentation and border effect: Based on empirical analysis of 15 cities in Yangtze River Delta province. Econ. Res. J. 2014, 49, 18–32. [Google Scholar]
- Ge, Y.; Wang, H.H.; Ahn, S.K. Cotton market integration and the impact of China’s new exchange rate regime. Agric. Econ. 2010, 41, 443–451. [Google Scholar] [CrossRef]
- Liu, R.; Liu, R. SOEs, Invisible Subsidy and Market Segmentation: Mechanism III. In How State-Owned Enterprises Drag on Economic Growth: Theory and Evidence from China; Springer: Berlin/Heidelberg, Germany, 2019; pp. 73–95. [Google Scholar]
- Zheng, S.; Kahn, M.E. China’s bullet trains facilitate market integration and mitigate the cost of megacity growth. Proc. Natl. Acad. Sci. USA 2013, 110, E1248–E1253. [Google Scholar] [CrossRef] [PubMed]
- Yang, Z.; Ye, Z. Domestic market integration in China: The role of the financial sector. Chin. Econ. 2016, 49, 343–358. [Google Scholar] [CrossRef]
- Liu, H.B.; McCarthy, B.; Chen, T.; Guo, S.; Song, X. The Chinese wine market: A market segmentation study. Asia Pac. J. Mark. Logist. 2014, 26, 450–471. [Google Scholar] [CrossRef]
- Aruga, K.; Li, R. Testing market integration for Japanese retail seafood markets. Aust. J. Agric. Resour. Econ. 2016, 60, 212–226. [Google Scholar] [CrossRef]
- Lv, B.; He, Y. Decentralization, tax division and market segmentation. J. Peking Univ. Philos. Soc. Sci. 2019, 56, 54–66. [Google Scholar]
- Ma, Z.; Li, W.; Wang, Q. Does financial development promote regional economic integration?—Empirical evidence from Yangtze River Delta region. J. Harbin Univ. Commer. Soc. Sci. Ed. 2022, 2, 43–57. [Google Scholar]
- Wang, W.; Kong, F. Study on the impact of transportation infrastructure construction and Internet Development on regional market segmentation. J. Yunnan Univ. Financ. Econ. 2019, 36, 3–16. [Google Scholar]
- Zhou, L.; Feng, D. Structural decomposition and integration of market size: A Study based on China’s inter-regional Input-output table. J. Xiangtan Univ. Philos. Soc. Sci. Ed. 2016, 40, 80–84. [Google Scholar]
- Tuo, Y.; Kong, L. Will target constraints on economic growth exacerbate beggar-thy-neighbor policies? Mod. Econ. Res. 2022, 8, 25–39. [Google Scholar]
- Xie, F.; Yuan, L.; Fu, W. How can the Yangtze River Delta achieve high-quality market integration?—Based on the perspective of opening up, upgrading of industrial structure and financial development. Reform 2021, 6, 112–124. [Google Scholar]
- Samuelson, P.A. Theoretical notes on trade problems. Rev. Econ. Stat. 1964, 46, 145–154. [Google Scholar] [CrossRef]
- Parsley, D.C.; Wei, S.J. Explaining the border effect: The role of exchange rate variability, shipping costs, and geography. J. Int. Econ. 2001, 55, 87–105. [Google Scholar] [CrossRef]
- Dagum, C. A new approach to the decomposition of the Gini income inequality ratio. Empir. Econ. 1997, 22, 515–531. [Google Scholar] [CrossRef]
- Shahzad, M.A.; Razzaq, A.; Qing, P.; Rizwan, M.; Faisal, M. Food availability and shopping channels during the disasters: Has the COVID-19 pandemic changed peoples’ online food purchasing behavior? Int. J. Disaster Risk Reduct. 2022, 83, 103443. [Google Scholar] [CrossRef]
- Shahzad, M.A.; Qing, P.; Rizwan, M.; Razzaq, A.; Faisal, M. COVID-19 Pandemic, Determinants of Food Insecurity, and Household Mitigation Measures: A Case Study of Punjab, Pakistan. Healthcare 2021, 9, 621. [Google Scholar] [CrossRef]
- Bagnied, M.A.; Speece, M. Marketing and regional integration for food security in the Arab world. J. Macromarket. 2019, 39, 115–135. [Google Scholar] [CrossRef]
- Simola, A.; Boysen, O.; Ferrari, E.; Nechifor, V.; Boulanger, P. Economic integration and food security—The case of the AfCFTA. Glob. Food Secur. 2022, 35, 100651. [Google Scholar] [CrossRef]
- Sanogo, I.; Amadou, M.M. Rice market integration and food security in Nepal: The role of cross-border trade with India. Food Policy 2010, 35, 312–322. [Google Scholar] [CrossRef]
- Caliendo, L.; Opromolla, L.D.; Parro, F.; Sforza, A. Goods and factor market integration: A quantitative assessment of the EU enlargement. J. Political Econ. 2021, 129, 3491–3545. [Google Scholar] [CrossRef]
- Antwiago Amarchey, C.; Adjei Kwakwa, P. Spatial market integration analysis of plantain markets in mid Ghana. Cogent Bus. Manag. 2024, 11, 2311222. [Google Scholar] [CrossRef]
- Ahmed, M.; Singla, N.; Singh, K. Market integration and price transmission in wheat markets of India: A transaction cost approach. J. Agribus. Dev. Emerg. Econ. 2024, 14, 552–569. [Google Scholar] [CrossRef]
- Heerman, K.E.R.; Arita, S.; Gopinath, M. Asia-Pacific Integration with China versus the United States: Examining Trade Patterns under Heterogeneous Agricultural Sectors. Am. J. Agric. Econ. 2015, 97, 1324–1344. [Google Scholar] [CrossRef]
- Lai, J.T.; McNelis, P.D.; Yan, I.K.M. Regional capital mobility in China: Economic reform with limited financial integration. J. Int. Money Financ. 2013, 37, 493–503. [Google Scholar] [CrossRef]
- Sekhar, C. Agricultural market integration in India: An analysis of select commodities. Food Policy 2012, 37, 309–322. [Google Scholar] [CrossRef]
- Olper, A.; Raimondi, V. Agricultural market integration in the OECD: A gravity-border effect approach. Food Policy 2008, 33, 165–175. [Google Scholar] [CrossRef]
- d’Amato, M.; Cucuzza, G. Cyclical capitalization: Basic models. Aestimum 2022, 80, 45–54. [Google Scholar] [CrossRef]
- Deaconu, A.; Oprean, V.B.; Buiga, A. Trends in real estate appraisal: An emerging context. Afr. J. Bus. Manag. 2015, 9, 478–489. [Google Scholar]
Variable | Observations | Mean | Standard Deviation |
---|---|---|---|
Market integration | 620 | 45.1109 | 14.2471 |
Openness to outside world | 620 | 0.3022 | 0.3549 |
Fiscal decentralization | 620 | 2.6472 | 2.0733 |
Level of financial development | 620 | 0.0601 | 0.0321 |
Traffic conditions | 620 | 13.0894 | 7.9663 |
Market size | 620 | 0.2996 | 0.7859 |
Gross domestic product | 620 | 1.8594 | 1.3063 |
Industrial structure | 620 | 0.1105 | 0.0595 |
Level of information development | 620 | 0.3881 | 0.2211 |
Variable | Nationwide | Eastern | Central | Western |
---|---|---|---|---|
β | −0.5496 *** | −0.4863 *** | −0.5407 *** | −0.6107 *** |
(0.0348) | (0.0544) | (0.0687) | (0.0590) | |
constant | 2.0958 *** | 1.8267 *** | 2.0732 *** | 2.2359 *** |
(0.1309) | (0.2098) | (0.2653) | (0.2240) | |
v | 0.0399 | 0.0333 | 0.0389 | 0.0472 |
N | 589 | 209 | 152 | 228 |
R2 | 0.309 | 0.290 | 0.303 | 0.333 |
Variable | Nationwide | Eastern | Central | Western |
---|---|---|---|---|
β | −0.8567 *** | −0.7808 *** | −0.9328 *** | −0.9653 *** |
(0.0428) | (0.0726) | (0.0853) | (0.0685) | |
Openness to outside world | −0.1618 | −0.0413 | −0.7104 | −0.2534 |
(0.1187) | (0.1558) | (0.7903) | (0.4876) | |
Fiscal decentralization | −0.0403 * | −0.3311 ** | −0.1835 ** | −0.0120 |
(0.0212) | (0.1543) | (0.0765) | (0.0247) | |
Level of financial development | 2.2757 * | 0.5190 | 4.3289 | 2.0206 |
(1.3213) | (2.3657) | (3.5086) | (2.1179) | |
Traffic conditions | 0.0119 ** | 0.0175 * | 0.0318 *** | −0.0044 |
(0.0049) | (0.0096) | (0.0086) | (0.0091) | |
Market size | 0.0197 | −0.0313 | −2.1376 | 0.4790 |
(0.0465) | (0.0611) | (0.9099) | (0.8900) | |
Gross domestic product | −0.0362 | 0.0447 | 0.0105 | −0.1141 |
(0.0274) | (0.0373) | (0.1672) | (0.0705) | |
Industrial structure | −1.5055 ** | −0.0283 | −1.1071 | −5.1934 *** |
(0.6775) | (1.6648) | (0.9744) | (1.6677) | |
Level of information | 0.3637 ** | 0.3248 | 0.4055 | 0.7656 ** |
(0.1439) | (0.2024) | (0.5800) | (0.3509) | |
constant | 3.1809 *** | 2.9868 *** | 3.7382 *** | 4.2686 *** |
(0.1976) | (0.4564) | (0.4030) | (0.4927) | |
v | 0.0971 | 0.0759 | 0.1350 | 0.1681 |
N | 589 | 209 | 152 | 228 |
R2 | 0.434 | 0.410 | 0.486 | 0.497 |
Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content. |
© 2025 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
Share and Cite
Liu, F.; Gu, Y.; Liu, Q. Regional Differences and Dynamic Evolution of Agricultural Product Market Integration in China. Agriculture 2025, 15, 861. https://doi.org/10.3390/agriculture15080861
Liu F, Gu Y, Liu Q. Regional Differences and Dynamic Evolution of Agricultural Product Market Integration in China. Agriculture. 2025; 15(8):861. https://doi.org/10.3390/agriculture15080861
Chicago/Turabian StyleLiu, Fuxing, Yumeng Gu, and Qin Liu. 2025. "Regional Differences and Dynamic Evolution of Agricultural Product Market Integration in China" Agriculture 15, no. 8: 861. https://doi.org/10.3390/agriculture15080861
APA StyleLiu, F., Gu, Y., & Liu, Q. (2025). Regional Differences and Dynamic Evolution of Agricultural Product Market Integration in China. Agriculture, 15(8), 861. https://doi.org/10.3390/agriculture15080861